India’s Solar Power Revolution Could Have Global Effect

India has a Solar Mission to install 20,000 MW of solar power by 2022. Solar electricity is already cheaper than electricity produced with diesel generators. These optimistic figures from India, the second most populated country in the world, has led the New Scientist magazine to write an in-depth article about it saying that India’s solar power revolution could have a ripple effect across the globe.

Solar panel prices fell by nearly 50 percent in 2011 and now they cost just one-quarter of what they did in 2008. This is good news for a good slice of the Indian population, one quarter of which lacks access to electricity. But electricity connection is not reliable, hence the use of diesel generators as backup power, increasing India’s share of greenhouse gases.

Solar electricity has fallen to 8.78 rupees per kilowatt hour (against 17 rupees for diesel-generated power) due to falling production costs. Acording to a Bloomberg News Energy Finance specialist, solar is now cheaper than diesel wherever it’s as sunny as Spain, which includes many parts of the world such as chunks of Latin America, Africa and Asia. Analysts say that by 2015 solar electricity will be as cheap as grid electricity in half of all countries.

“Solar panel prices fell by nearly 50 percent in 2011 and now they cost just one-quarter of what they did in 2008.” It’s good news to have declining prices in solar panels, but there are two large caveats. First, the price fall since 2008 has been largely do to the global recession and over production. Many solar production facilities are currently running at a loss and the suppliers of silicon are also selling below margin. So we can reasonably expect solar panels to start rising in cost over the next few years. Secondly, many solar advocates forget that solar panels are only a portion of the cost of solar power and currently they only account for roughly half the cost. So the cost of solar power is not falling nearly as fast as the cost of solar panels. And indeed, even if solar panels were free it would only cut the cost of the electricity provided be 50% which would still be above the cost of most other sources for electrical power.Solar power has a future as a daytime peaking source, but with current technology it’s unlikely to go much past this niche. Storage is too costly and solar power itself isn’t that cheap.